Welfare,
Work, and Choices: Expanding Notions of Policy Incentive
Judith A. Levine
Abstract
Sociologists and economists have different disciplinary tendencies
when analyzing the labor supply of welfare recipients. Sociologists
often argue that recipients have no choice about working: they are
unemployed because they can find neither jobs nor child care services.
Economists assume recipients have choices, but often focus exclusively
on the financial incentives established by law, particularly tax
rates on recipients' earnings, costs of health insurance, and costs
of child care. In this paper, I argue that a synthesis of the two
approaches would further our understanding of the welfare-to-work
transition.
Based on my semistructured interviews with current and recent
AFDC recipients, I suggest that we expand standard economic models
in three ways. First, policy designed to give AFDC recipients financial
incentives to work will only be effective if recipients believe
promised benefits will accrue in practice, which they often do not.
Thus we need to include estimates of recipients' actual expectations,
not just their legal entitlements, when predicting behavior. Second,
analysts must make more systematic attempts to incorporate nonmonetary
work incentives, such as negative interaction with case workers
and the psychic benefits of employment, and work disincentives,
such as oppressive supervision in jobs and anxieties about children's
well-being. Third, the costs of both work and welfare receipt depend
on the resources provided by recipients' social networks. Shared
income may decrease financial incentives to work, while network-provided
child care is likely to increase work incentives. Social networks
that provide job information and contacts lower both the financial
and psychological costs of job search, easing the transition to
work.
Judith A. Levine, Department of Sociology,
Northwestern University
To Order:
Hard copies of IPR working papers cost $5.00 each (international orders are $10 each). We only accept checks drawn on U.S. bank and payable in U.S. funds. Checks or
money orders should be made payable to Northwestern University and sent to
the following address:
Publications Department - WP Orders
Institute for Policy Research
2040 Sheridan Rd., Evanston, IL 60208-4100.
For information, call 847-491-8712 or email ipr@northwestern.edu.
Please note that we do not accept credit cards.
